DOCKETED

Docket Number:

16-RPS-02

Project Title: Appeal by Los Angeles Department of Water & Power re Renewables Portfolio Standard Certification Eligibility

TN #: 213036

Document Title: 27 Shell NAESB Base Contract and Transaction Confirmation (Bates Nos. LA000508-LA000535)

Description: N/A

Filer: Pjoy Chua

Organization: LADWP

Submitter Role: Applicant

Submission Date:

8/30/2016 12:50:16 PM

Docketed Date: 8/30/2016

LADWP Agreement No. 96 125-510

Base Contract for Sale and Purchase of Natural Gas This Base Contract is executed by the LADWP as of the following date: l- -I - C> 8 following:

The parties to this Base Contract are the

City of Los Angeles Acting By and Through the Department of Water and Power ("LADWP"l Duns Number: ~36>e·c!:14ot~Ot:.·1.u9l!l6c.J.1 ~~--------­Contract Number:.::-:-:c--:--====-------U.S. Federal Tax ID Number: ll.95g_,-Q60\!!0!!0u7.!23!!6 ______ _

Notices: 111 North Hope St.. Rm. 1150. Los Angeles. CA 90012 Attn: Natural Gas Manager Phone: 213-367-1735 Fax: 213-367-1772

Confirmations: 111 North Hope St.. Rm. 1150, Los Angeles. CA 90012 Attn: Natural Gas Manager Phone: 213-367-1748 Fax: 213-367-1772

Invoices and Payments: 111 North Hope St .. Rm. 1150. Los Angeles. CA 90012 Attn: Natural Gas Manager Phone: 213-367-1748 Fax: 213-367-1772

Wire Transfer or ACH Numbers !if apolicabfel: BANK: Bank of America. Los Angeles Commercial Banking 1459 ABA: 121000358 tD'':J: 14597-03566 ~ : ·I' Details: ------~~~-------<·:_: -,_~

and Coral Energy Resources. L.P. a Delaware Limited Partnership. a subsidiary of Shell Enemy North America (US). L.P. Duns Number: !!0J.:1·:;>,50!!1!.:·4~4i<2;,.t1 __________ _

Contract Number: :-:-:--:---o:::-:==:-:--------­U.S. Federal Tax ID Number: L7!!6-:li0Q'50!ii52!i5.,.84"--~--~-

4445 Eastaate Mall. Suite 100. San Diego. CA 92121 Attn: Contract Administration Phone: (858) 320-1500 Fax: (858) 320-1585

909 Fannin Plaza Level1 Houston TX 77010 Attn: Contract Administration Phone: (713) 230-7505 Fax: (713) 265-2171

909 Fannin Plaza Level 1 Houston TX 77010 Attn: Gas Accounting Phone: (713) 767-5400 Fax: (713) 767-5445

BANK: Citibank N.A. ABA: 021000089 ACCT: 30603902 Other Details: ---~~-----------

This Base Contract inccrporates by reference for all purposes the General Terms and Conditions for Sale and Purchase of Natural Gas published by the North American Energy Standards Board. The parties hereby agree to the following provisions offered in said General Terms and c d'tions In th t th rti f 'It h k bo th ifi d d fa It .. h II I Select o I bo fr h r on 1 eeven epa es a1 oc ec a X, espec e e U prOVISIOn S a appy. nyone x om eac sec 10n:

Section 1.2 D Oral (default) Section 7.2 181 25'" Day of Month following Month of Transaction 181 Written Payment Date delive!:¥, (default) Procedure · D 20 " Day of Month following Month of

deliverv Section 2.5 181 2 Business Days after receipt (default) Section 7.2 lEI Wire transfer (default) Conf1rm D __ Business Days after receipt Method of D Automated Clearinghouse Credit (ACH) Deadline Payment 0 Check Section 2.6 181 Seller (default) Section 7. 7 181 Netting applies (default) Confirming 0 Buyer Netting 0 Netting does not apply Party 0

Section 3.2 181 Cover Standard (default) Section 1 0.3. 1 181 Early Termination Damages Apply (default) Pertormance 0 Spot Price Standard Early Termination 0 Early Termination Damages Do Not Apply Obligation Danianes

Note: The following Spot Price Publication applies to both Section 10.3.2 0 Other Agreement Setoffs Apply (default) Other Agreement 181 Other Agreement Setoffs Do Not Apply of the immediately preceding. Setoffs

Section 2.26 181 Gas Daily Midpoint (default) Section 14.5 Spot Price 0 Choice Of Law See Special Provisions Publication Section 6 lEI Buyer Pays At and After Delivery Point Section 14.10 0 Confidentiality applies (default) Taxes (default) Confidentiality 181 Confidentiality does not apply

0 Seller Pavs Before and At Deliverv Point 181 Special Provisions :Pages 11 and 12 ~,llddendum(s):

?~~~~~~-~ ~-~~??_ ~orth American Energy Standards Board, Inc. NAESB Standard 6.3.1

LA000508

I ,

General Terms and Conditions Base Contract for Sale and Purchase of Natural Gas

i . ) StCTION 1. PURPOSE AND PROCEDURES 1 .1. These General Terms and Conditions are intended to facilitate purchase and sale transactions of Gas on a Finm or interruptible basis. "Buyer" refers to the party receiving Gas and "Seller" refers to the party delivering Gas. The entire agreement between the parties shall be the Contract as defined in Section 2.7.

The parties have selected either the "Oral Transaction Procedure" or the "Written Transaction Procedure" as Indicated on the Base Contract.

Oral Transaction Procedure:

1.2. The parties will use the following Transaction Confirmation procedure. Any Gas purchase and sale transaction may be effectuated in an EDI transmission or telephone conversation with the offer and acceptance constituting the agreement of the parties. The parties shall be legally bound from the time they so agree to transaction terms and may each rely thereon. Any such transaction shall be considered a "writing" and to have been "signed". Notwithstanding the foregoing sentence, the parties agree that Confirming Party shall, and the other party may, confirm a telephonic transaction by sending the other party a Transaction Confirmation by facsimile, EDI or mutually agreeable electronic means within three Business Days of a transaction covered by this Section 1.2 (Oral Transaction Procedure) provided that the failure to send a Transaction Confirmation shall not invalidate the oral agreement of the parties. Confirming Party adopts its confirming letierhead, or the like, as its signature on any Transaction Confimnation as the identification and authentication of Confirming Party. If the Transaction Confirmation contains any provisions other than those relating to the commercial terms of the transaction (I.e., price, quantity, performance obligation, delivery point, period of delivery and/or transportation conditions), which modify or supplement the Base Contract or General Terms and Conditions of this Contract (e.g., arbitration or additional representations and warranties), such provisions shall not be deemed to be accepted pursuant to Section 1.3 but must be expressly agreed to by both parties; provided that the foregoing shall not invalidate any transaction agreed to by the parties.

Written Transaction Procedure:

1 .2. The parties will use the following Transaction Confirmation procedure. Should the parties come to an agreement regarding a Gas purchase and sale transaction for a particular Delivery Period, the Confirming Party shall, and the other party may, record that f?:~~~m~nt on a Transaction Confirmation and communicat~ such Transact!on Confirmation by facsimile, EDI o.r mutually agreeable , "·, ;a nrc means, to the other party by the close of the Business Day followrng the date of agreement. The part1es acknowledge that \~':-</agreement will not be binding until the exchange of nonconflicting Transaction Confirmations or the passage of the Confirm Deadline without objection from the receiving party, as provided in Section 1 .3.

1 . 3. If a sending party's Transaction Confirmation Is materially different from the receiving party's understanding of the agreement referred to in Section 1 .2, such receiving party shall notify the sending party via facsimile, EDI or mutually agreeable electronic means by the Confinm Deadline, unless such receiving party has previously sent a Transaction Confirmation to the sending party. The failure of the receiving party to so notify the sending party in writing by the Confirm Deadline constitutes the receiving party's agreement to the terms of the transaction described In the sending party's Transaction Confirmation. If there are any material differences between timely sent Transaction Confirmations governing the same transaction, then neither Transaction Confirmation shall be binding until or unless such differences are resolved including the use of any evidence that clearly resolves the differences in the Transaction Confirmations. In the event of a conflict among the terms of (i) a binding Transaction Confirmation pursuant to Section 1 .2, (II) the oral agreement of the parties which may be evidenced by a reconded conversation, where the parties have selected the Oral Transaction Procedure of the Base Contract, (iii) the Base Contract, and (lv) these General T arms and Conditions, the tenms of the documents shall govern in the priority listed in this sentence.

1.4. The parties agree that each party may electronically record all telephone conversations with respect to this Contract between their respective employees, without any special or further notice to the other party. Each party shall obtain any necessary consent of its agents and employees to such recording. Where the parties have selected the Oral Transaction Procedure in Section 1.2 of the Base Contract, the parties agree not to contest the validity or enforceability of telephonic recordings entered Into In accordance with the requirements of this Base Contract. However, nothing herein shall be construed as a waiver of any objection to the admissibility of such evidence.

SECTION 2. DEFINITIONS The terms set forth below shall have the meaning ascribed to them below. Other terms are also defined elsewhere in the Contract and shall have the meanings ascribed to them herein.

2. 1 . "i'Jtemative Damages" shall mean such damages, expressed in dollars or dollars per MMBtu, as the parties shall agree upon In the Transaction Confirmation, in the event either Seller or Buyer fails to pelform a Firm obligation to deliver Gas in the case of Seller or to receive Gas In the case of Buyer.

2.2. "Base Contract" shall mean a contract executed by the parties that incorporates these General Terms and Conditions by reference; that specifies the agreed selections of provisions contained herein; and that sets forth other infonmation required herein and any Special

' <ions and addendum(s) as identified on page one.

'ic,;;·' "British thermal unit" or "Btu" shall mean the International BTU, which is also called the Btu (IT).

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2.4. "Business Day'' shall mean any day except Saturday, Sunday or Federal Reserve Bank holidays.

2. 5. "Confirm Deadline" shall mean 5:00 p.m. in the receiving party's time zone on the second Business Day following the Day a Transaction Confirmation is received or, if applicable, on the Business Day agreed to by the parties in the Base Contract; provided, if

~ransaction Confirmation is time stamped after 5:00 p.m. in the receiving party's time zone, it shall be deemed received at the ._.hg of the next Business Day.

2. 6. "Confirming Party" shall mean the party designated in the Base Contract to prepare and forward Transaction Confirmations to the other party.

2. 7. "Contract" shall mean the legally-binding relationship established by (i) the Base Contract, ~i) any and all binding Transaction Confirmations and (iii) where the parties have selected the Oral Transaction Procedure in Section 1.2 of the Base Contract, any and all transactions that the parties have entered into through an EDI transmission or by telephone, but that have not been confirmed In a binding Transaction Confirmation.

2.8. "Contract Price" shall mean the amount expressed in U.S. Dollars per MMBtu to be paid by Buyer to Seller for the purchase of Gas as agreed to by the parties in a transaction.

2. 9. "Contract Quantity" shall mean the quantity of Gas to be delivered and taken as agreed to by the parties in a transaction.

2.1 0. "Cover Standard", as referred to in Section 3.2, shall mean that if there is an unexcused failure to take or deliver any quantity of Gas pursuant to this Contract, then the performing party shall use commercially reasonable efforts to (i) if Buyer is the performing party, obtain Gas, (or an allernate fuel if elected by Buyer and replacement Gas is not available), or (ii) if Seller is the performing party, sell Gas, in either case, at a price reasonable for the delivery or production area, as applicable, consistent with: the arnount of notice provided by the nonperforming party; the immediacy of the Buyer's Gas consumption needs or Seller's Gas sales requirements, · as applicable; the quantities involved; and the anticipated length of failure by the nonperforming party.

2.11. "Credit Support Obligation(s)" shall rnean any obligation(s) to provide or establish credit support for, or on behalf of, a party to this Contract such as an irrevocable standby letter of credit, a margin agreement, a prepayment, a security interest in an asset, a performance bond, guaranty, or other good and sufficient security of a continuing nature.

2.12. "Day" shall mean a period of 24 consecutive hours, coextensive with a "day" as defined by the Receiving Transporter in a particular transaction.

2.13. "Delivery Period" shall be the period during which deliveries are to be made as agreed to by the parties in a transaction.

2.14. "Delivery Point(s)" shall mean such point(s) as are agreed to by the parties in a transaction.

2,J.5. "EDI" shall mean an electronic data interchange pursuant to an agreement entered Into by the parties, specifically relating to (';::·:;:'i:)?mmunication of Transaction Confirmations under this Contract.

';{;(·,.;. "EFP" shall mean the purchase, sale or exchange of natural Gas as the "physical" side of an exchange for physical transaction involving gas futures contracts. EFP shall incorporate the meaning and remedies of "Firrn", provided that a party's excuse for nonperformance of its obligations to deliver or receive Gas will be governed by the rules of the relevant futures exchange regulated under the Commodity Exchange Act.

2.17. "Firm" shall mean that either party rnay interrupt its performance without liability only to the extent that such perfonnance is prevented for reasons of Force Majeure; provided, however, that during Force Majeure_ interruptions, t~e party invoking Force Majeure may be responsible for any Imbalance Charges as set forth in Section 4.3 related to its Interruption after the nomination is made to the Transporter and until the change in deliveries and/or receipts is confirmed by the Transporter.

2.18. "Gasn shall mean any mixture of hydrocarbons and noncombustible gases in a gaseous state consisting primarily of methane.

2.19. "Imbalance Charges" shall mean any fees, penalties, costs or charges (In cash or in kind) assessed by a Transporter for failure to satisfy the Transporter's balance and/or nomination requirements.

2.20. "Interruptible" shall mean that either party may interrupt its performance at any lime for any reason, whether or not caused by an event of Force Majeure, with no liability, except such interrupting party may be responsible for any Imbalance Charges as set forth in Section 4.3 related to its interruption after the nomination is made to the Transporter and until the change in deliveries and/or receipts is confirmed by Transporter.

2.21. "MMBtu" shall mean one rnillion British therrnal units, which is equivalent to one dekatherm.

2.22. "Month" shall mean the period beginning on the first Day of the calendar rnonth and ending Immediately prior to the commencement of the first Day of the next calendar month.

2.23. "Payrnent Date" shall mean a date, as Indicated on the Base Contract, on or before which payrnent is due Seller for Gas received by Buyer in the previous Month.

2.24. "Receiving Transporter" shall mean the Transporter receiving Gas at a Delivery Point, or absent such receiving Transporter, the Transporter delivering Gas at a Delivery Point.

2 75. "Scheduled Gas" shall mean the quantity of Gas confirmed by Transporter(s) for movement, transportation or management.

"Spot Price " as referred to in Section 3.2 shall mean the price listed in the publication indicated on the Base Contract, under h>o' listing applicable to the geographic location closest In proxlrnlty to the Delivery Point(s) for the relevant Day; provided, if there is no

Page 3 of 12 LADWP Agreement 96 125-510

LA000510

single price published for such location for such Day, but there is published a range of prices, then the Spot Price shall be the average of such high and low prices. If no price or range of prices is published for such Day, then the Spot Price shall be the average of the following: (i) the price (determined as stated above) for the first Day for which a price or range of prices is published that next r·~".edes the relevant Day; and (ii) the price (determined as stated above) for the first Day for which a price or range of prices is · jhed that next follows the relevant Day.

i:d. "Transaction Confirmation" shall mean a document, similar to the form of Exhibit A, setting forth the terms of a transaction formed pursuant to Section 1 for a particular Delivery Period.

2.28. 'Termination Option" shall mean the option of either party to terminate a transaction in the event that the other party fails to perform a Firm obligation to deliver Gas in the case of Seller or to receive Gas in the case of Buyer for a designated number of days during a period as specified on the applicable Transaction Confirmation.

2.29. "Transporter(s)" shall mean all Gas gathering or pipeline companies, or local dis!Jibutlon companies, acting In the capacity of a transporter, transporting Gas for Seller or Buyer upstream or downstream, respectively, of the Delivery Point pursuant to a particular transaction.

SECTION 3. PERFORMANCE OBLIGATION 3. 1 . Seller agrees to sell and deliver, and Buyer agrees to receive and purchase, the Contract Quantity for a particular transaction in acccrdance with the terms of the Contract. Sales and purchases will be on a Firm or Interruptible basis, as agreed to by the parties in a transaction

The parties have selected either the ''Cover Standard" or the ''$p_ot Price Standard" as indicated on the Base Contract.

Cover Standard:

3.2. The sole and exclusive remedy of the parties in the event of a breach of a Firm obligation to deliver or receive Gas shall be recovery of the following: (i) in the event of a breach by Seller on any Day(s), payment by Seller to Buyer in an amount equal to the positive difference, if any, between the purchase price paid by Buyer utilizing the Cover Standard and the Contract Price, adjusted for commercially reasonable differences in transportation costs to or from the Delivery Point(s), multiplied by the difference between the Contract Quantity and the quantity actually delivered by Seller for such Day(s); or (ii) in the event of a breach by Buyer on any Day(s), payment by Buyer to Seller in the amount equal to the positive difference, if any, between the Contract Price and the price received by Seller utilizing the Cover Standard for the resale of such Gas, adjusted for commercially reasonable differences in transportation costs to or from the Delivery Point(s), multiplied by the difference between the Contract Quantity and the quantity actually taken by Buyer for such Day(s); or (iii) in the event that Buyer has used commercially reasonable efforts to replace the Gas or Seller has used commercially reasonable efforts to sell the Gas to a third party, and no such replacement or sale is available, then the sole and e~~,Qiusive remedy of the performing party shall be any unfavorable difference between the Contract Price and the Spot Price, adjusted

1',. :.-.•!ch transportation to the applicable Delivery Point, multiplied by the difference between the Contract Quantity and the quantity \,. ·, Jlly delivered by Seller and received by Buyer for such Day(s). Imbalance Charges shall not be recovered under this Section 3.2, bdt Seller and/or Buyer shall be responsible for Imbalance Charges, if any, as provided in Section 4.3. The amount of such unfavorable difference shall be payable five Business Days after presentation of the performing party's invoice, which shall set forth the basis upon which such amount was calculated.

Spot Price Standard:

3.2. The sole and exclusive remedy of the parties in the event of a breach of a Firm obligation to delivor or receive Gas shall be recovery of the following: (i) in the event of a breach by Seller on any Day(s), payment by Seller to Buyer in an amount equal to the difference between the Contract Quantity and the actual quantity delivered by Seller and received by Buyer for such Day(s), multiplied by the positive difference, if any, obtained by subtracting the Contract Price from the Spot Price; or (ii) in the event of a breach by Buyer on any Day(s), payment by Buyer to Seller in an amount equal to the difference between the Contract Quantity and the actual quantity delivered by Seller and received by Buyer for such Day(s), multiplied by the positive difference, if any, obtained by subtracting the applicable Spot Price from the Contract Price. Imbalance Charges shall not be recovered under this Section 3.2, but Seller and/or Buyer shall be responsible for Imbalance Charges, if any, as provided In Section 4.3. The amount of such unfavorable difference shall be payable live Business Days after presentation of the performing party's invoice, which shall set forth the basis upon which such amount was calculated.

3.3. Notwithstanding Section 3.2, the parties may agree to Alternative Damages in a Transaction Confirmation executed in writing by both parties.

3.4. In addition to Sections 3.2 and 3.3, the parties may provide for a Termination Option in a Transaction Confirmation executed in writing by both parties. The Transaction Confirmation containing the Termination Option will designate the length of nonperformance triggering the Termination Option and the procedures for exercise thereof, how damages for nonperformance will be compensated, and how liquidation costs will be calculated.

SECTION 4. TRANSPORTATION, NOMINATIONS, AND IMBALANCES 4.1 . Seller shall have the sole responsibility for transporting the Gas to the Delivery Point(s). Buyer shall have the sole responsibility for transporting the Gas from the Delivery Point(s).

4. 1.. The parties shall coordinate their nomination activities. giving sufficient time to meet the deadlines of the affected Transporter(s). Each shall give the other party timely prior Notice, sufficient to meet the requirements of all Transporter(s) involved in the transaction, of the

· .• ities of Gas to be delivered and purchased each Day. Shoukl either party become aware that actual deliveries at the Delivery Point(s) are greater or lesser than the Scheduled Gas, such party shall promptly notify the other party.

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4.3. The parties shall use commercially reasonable efforts to avoid imposiUon of any Imbalance Charges. If Buyer or Seller receives an invoice from a Transporter that includes Imbalance Charges, the parties shall dete011ine the validity as well as the cause of such Imbalance Charges. If the Imbalance Charges were incurred as a result of Buye(s receipt of quantlUes of Gas greater than or less than the Scheduled Gas, teoo Buyer shall pay for such Imbalance Charges or reimburse Seller for such Imbalance Charges paid by Seller. If the Imbalance Charges

incurred as a result of Selle!'s delivery of quantities of Gas greater than or less than the Scheduled Gas, then Seller shall pay for such " '"ranee Charges or reimburse Buyer for such Imbalance Charges paid by Buyer.

SECTION 5. QUALITY AND MEASUREMENT All Gas delivered by Seller shall meet the pressure, quality and heat content requirements of the Receiving Transporter. The unit of quantity measurement tor purposes of this Contract shall be one MMBtu dry. Measurement of Gas quantities hereunder shall be in accordance with the established procedures of the Receiving Transporter.

SECTION 6 TAXES The parties have selected either "Buyer Pays At and After Delivery Point" or "Seller Pays Before and At Delivery Potnt" as indicated Base Contract.

~."'Pays At and After Delivery Point:

Seller shall pay or cause to be paid all taxes, fees, levies, penalties, licenses or charges imposed by any government autholity (''Taxes") on or with respect to the Gas prior to the Delivery Point(s). Buyer shall pay or cause to be paid all Taxes on or with respect to the Gas at the Delivery Point(s) and all Taxes after the Delivery Point(s). If a party is required to remit or pay Taxes that are the other party's responsibility hereunder, the party responsible for such Taxes shall promptly reimburse the other party for such Taxes. Any party entitled to an exemption from anv such Taxes or charues shall furnish the other party' anynecessarydocumentatlon thereof.

Seller Pays Before and At Dellverv Point:

Seller shall pay or cause to be paid all taxes, fees, levies, penalties, licenses or charges imposed by any government authonty ('Taxes') on or with respect to the Gas plior to the Delivery Point(s) and all Taxes at the Delivery Point(s). Buyer shall pay or cause to be paid all Taxes on or with respect to the Gas after the Delivery Point(s). If a party is required to remit or pay Taxes that are the other party's responsibility hereunder, the party responsible for such Taxes shall promptly reimburse the other party for such Taxes. Any party entitled to an exemption from any such Taxes or charges shall furnish the other party' any necessary documentation thereof.

SECTION 7. BILLING, PAYMENT, AND AUDIT 7. 1 , Seller shall invoice Buyer for Gas delivered and received in the preceding Month and for any other applicable charges, providing

· · · :orting documentation acceptable in industry practice to support the amount charged. If the actual quantity delivered is not known by the ) date, billing will be prepared based on the quantity of Scheduled Gas. The Invoiced quantity will then be adjusted to the actual quantity on

tt11J rOIIowing Month's billing or as soon thereafter as actual delivery infonnation is available.

7 .z. Buyer shall remit the amount due under Section 7.1 in the manner specified in the Base Contract, in immediately available funds, on or before the later of the Payment Date or 10 Days aRer receipt of the invoice by Buyer; provided that ~tha Payment Date is not a Business Day, payment is due on the next Business Day following that date. In the event any payments are due Buyer hereunder, payment to Buyer shall be made in acoordance with this Section 7.2.

7 .3. In the event payments become due pursuant to Sections 3.2 or 3.3, the performing party may submit an invoice to the nonperforming party for an accelerated payment setting forth the basis upon which the invoiced amount was calculated. Payment from the nonperforming party will be due five Business Days after receipt of invoice.

7 .4. If the invoiced party, in good faith, disputes the amount of any such Invoice or any part thereof, such invoiced party will pay such amount as it concedes to be correct; provided, however, if the invoiced party disputes the amount due, it must provide supporting documentation acceptable in industry practice to support the amount paid or disputed. In the event the parties are unable to resolve such dispute, either party may pursue any remedy available at law or in equity to enforce its rights pursuant to this Section.

7. 5. If the invoiced party fails to remit the full amount payable when due, interest on the unpaid portion shall accrue from the date due until the date of payment at a rate equal to tha lower of (i) the then-effective prtme rate of interest published under "Money Rates" by The Wall Street Journal, plus two percent per annum; or (ii) the maximum applicable lawful interest rate.

7,6, A party shall have the right, at its own expense, upon reasonable Notice and at reasonable times, to examine and audit and to obtain copies of the relevant portion of the books, records, and telephone recordings of the other party only to the extent reasonably necessary to verify the accuracy of any statement, charge, payment, or computation made under the Conliact. This right to examine, audit, and to obtain copies shall not be available with respect to proprietary info011afion not directly relevant to transactions under this Contract. All invoices and bllrings shall be conclusively presumed final and accurate and aU associated claims for under- or overpayments shall be deemed waived unless such invoices or billings are objected to in wliting, with adequate explanation and/or documentation, within two years after the Month of Gas delivery. All retroactive adjustments under Section 7 shall be paid in full by the party owing payment within 30 Days of Notice and substantiation of such inaccuracy.

7.7. Unless the parties have elected on the Base Contract not to make this Section 7.7 applicable to this Contract, the parties shall net all undisputed amounts due and owing, and/or past due, arising under the Contract such that the party owing the greater amount shall

' a single payment of the net amount to the other party in accordance with Section 7; provided that no payment required to be j pursuant to the terms of any Credit Support Obligation or pursuant to Section 7.3 shall be subject to netting under this Section.

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If the parties have executed a separate netting agreement, the terms and conditions therein shall prevail to the extent inconsistent herewith.

SFC:TION 8. TITLE, WARRANTY, AND INDEMNITY

. . Unless otherwise specifically agreed, title to the Gas shall pass from Seller to Buyer at the Delivery Point(s). Seller shall have re~ponsiblllty for and assume any liability with respect to the Gas prior to its delivery to Buyer at the specified Delivery Point(s). Buyer shall have responsibility for and any liability with respect to said Gas after its delivery to Buyer at the Delivery Point(s).

8.2. Seller warrants that it will have the right to convey and will transfer good and merchantable title to all Gas sold hereunder and delivered by it to Buyer, free and clear of all liens, encumbrances, and claims. EXCEPT AS PROVIDED IN THIS SECTION 8.2 AND IN SEC110N 14.8, ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR ANY PARTICULAR PURPOSE, ARE DISCLAIMED.

8.3. Seller agrees to indemnify Buyer and save it harmless from all losses, liabilities or claims including reasonable attorneys' fees and costs of court ("Claims"), from any and all persons, arising from or out of claims of title, personal injury or property damage from said Gas or other charges thereon which attach before title passes to Buyer. Buyer agrees to indemnify Seiler and save It harmless from all Claims, from any and all persons, arising from or out of claims regarding payment, personal injury or property damage from said Gas or other charges thereon which attach after title passes to Buyer.

8.4. Notw~hstanding the other provisions of this Section 8, as between Seller and Buyer, Seller will be liable for all Claims to the extent that such arise from the failure of Gas delivered by Seller to meet the quality requirements of Section 5.

SECTION 9. NOTICES

9. 1. All Transaction Confirmations, invoices, payments and other communications made pursuant to the Base Contract ("Notices") shall be made to the addresses specified in writing by the respective parties from time to time.

9.2. All Notices required hereunder may be sent by facsimile or mutually acceptable electronic means, a nationally recognized overnight courier service, f1rst class mail or hand delivered.

9. 3. Notice shall be given when received on a Business Day by the addressee. In the absence of proof of the actual receipt date, the following presumptions will apply. Notices sent by facsimile shall be deemed to have been received upon the sending party's receipt of its facsimile machine's confirmation of successful transmission. If the day on which such facsimile is received is not a Business Day or is after five p.m. on a Business Day, then such facsimile shall be deemed to have been received on the next following Business Day. Notice by overnight mail or courier shall be deemed to have been received on the next Business Day after it was sent o.~ such earlier time as is confirmed by the receiving party. Notice via first class mail shall be considered delivered five Business Days

;.mailing.

S~..:UION 10. FINANCIAL RESPONSIBILITY 1 0.1. If either party ("X") has reasonable grounds for insecurity regarding the performance of any obligation under this Contract (whether or not then due) by the other party ("Y'') (including, without limitation, the occurrence of a material change in the creditworthiness of Y), X may demand Adequate Assurance of Performance. "Adequate Assurance of Performance" shall mean sufficient security in the fonm, amount and for the term reasonably acceptable to X, including, but not limited to, a standby irrevocable letter of credit, a prepayment, a security interest in an asset or a performance bond or guaranty (including the issuer of any such security).

1 0.2. In the event (each an "Event of Default") either party (the "Defaulting Party") or its guarantor shall: (i) make an assignment or any general arrangement for the benefit of creditors; (ii) file a petition or otherwise commence, authorize, or acquiesce in the commencement of a proceeding or case under any bankruptcy or similar law for the protection of creditors or have such petition filed or proceeding commenced against it; (iii) otherwise become bankrupt or insolvent (however evidenced); (iv) be unable to pay its debts as they fall due; (v) have a receiver, provisional liquidator, conservator, custodian, trustee or other similar official appointed with respect to it or substantially all of its assets; (vi) fall to perform any obligation to the other party with respect to any Credit Support Obligations relating to the Contract; (vii) fail to give Adequate Assurance of Performance under Section 10.1 within 48 hours but at least one Business Day of a written request by the other party; or (viii) not have paid any amount due the other party hereunder on or before the second Business Day following written Notice that such payment is due; then the other party (the "Non-Defaulting Party") shall have the right, at its sole election, to immediately withhold and/or suspend deliveries or payments upon Notice and/or to terminate and liquidate the transactions under the Contract, in the manner provided in Section 1 0.3, in addition to any and all other remedies available hereunder.

1 0.3. If an Event of Default has occurred and is continuing, the Non-Defaulting Party shall have the right, by Notice to the Defaulting Party, to designate a Day, no earlier than the Day such Notice is given and no later than 20 Days after such Notice is given, as an early tenmination date (the "Early Termination Date") for the liquidation and termination pursuant to Section 10.3.1 of alt transactions under the Contract, each a ''Terminated Transaction". On the Early Termination Date, all transactions will terminate, other than those transactions, if any, that may not be liquidated and terminated under applicable law or that are, in the reasonable opinion of the Non~ Defaulting Party, commercially Impracticable to liquidate and terminate ("Excluded Transactions"), which Excluded Transactions must be liquidated and terminated as soon thereafter as is reasonably practicable, and upon termination shall be a Terminated Transaction

'Je valued consistent with Section 10.3.1 below. With respect to each Excluded Transaction, its actual termination date shall be . ,arly Termination Date for purposes of Section 10.3.1.

Page 6 of 12 LADWPAgreement 96125-510

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.

The parties have selected either "Early Termination Damages Apply" or "Early Termination Damages Do Not Apply" as indica the Base Contract.

1---E~rl~ Termination Damages Apply:

' '0.3. 1' As of the Early Termination Date, the Non-Defaulting Party shall determine, in good faith and in a commercially rtiiosonable manner, (i) the amount owed (whether or not then due) by each party with respect to all Gas delivered and received between the parties under Terminated Transactions and Excluded Transactions on and before the Early Termination Date and all other applicable charges relating to such deliveries and receipts (including without limitation any amounts owed under Section 3 .2), for which payment has not yet been made by the party that owes such payment under this Contract and (ii) the Market Value, as defined below, of each Terminated Transaction. The Non-Defaulting Party shall (x) liquidate and accelerate each Terminated Transaction at its Market Value, so that each amount equal to the difference between such Market Value and the Contract Value, as defined below, of such Terminated Transaction(s) shall be due to the Buyer under the Terminated Transaction(s) if such Market Value exceeds the Contract Value and to the Seller if the opposite is the case; and (y) where appropriate, discount each amount then due under clause (x) above to present value in a commercially reasonable manner as of the Early Termination Dale (to take account of the period between the date of liquidation and the date on which such amount would have otherwise been due pursuant to the relevant Terminated Transactions).

For purposes of this Section 10.3.1, "Contract Value" means the amount of Gas remaining to be delivered or purchased under a transaction multiplied by the Contract Price, and "Market Value" means the amount of Gas remaining to be delivered or purchased under a transaction multiplied by the market price for a similar transaction at the Delivery Point determined by the Non-Defaulting Party in a commercially reasonable manner. To ascertain the Market Value, the Non-Defaulting Party may consider, among other valuations, any or all of the settlement prices of NYMEX Gas futures contracts, quotations from leading dealers in energy swap· contracts or physical gas trading markets, similar sales or purchases and any other bona fide third-party offers, all adjusted for the length of the term and differences in transportation costs . A party shall not be required to enter into a replacement transaction(s) in order to determine the Market Value. Any extenslon(s) of the term of a transaction to which parties are not bound as of the Early Termination Date (including but not limited to "evergreen provisions") shall not be considered in determining Contract Values and Market Values. For the avoidance of doubt, any option pursuant to which one party has the right to extend the term of a transaction shall be considered in determining Contract Values and Market Values. The rate of Interest used In calculating net present value shall be determined bv the Non-Defaultina Partv in a commerciallv reasonable manner.

Earlv Termination Damaaes Do Not Applv:

10.3.1. As of the Early Termination Date, the Non-Defaulting Party shall determine, in good faith and in a commercially reasonable manner, the amount owed (whether or not then due) by each party with respect to all Gas delivered and received between Jh~ parties under Terminated Transactions and Excluded Transactions on and before the Early Termination Date and all other (<····f->~ble charges relating to such delive~: and receipts (including without limitation any amounts owed under Section 3.2), for which

· · ,,,1ent has not vet been made bv the oa that owes such oavment under this Contract. _______

The parties have selected either "Other Agreement Setoffs Apply" or "Other Agreement Setoffs Do Not Apply" as indicated Base Contract.

Other Agreement Setoffs Apply:

10.3.2. The Non-Defaulting Party shall net or aggregate, as appropriate, any and all amounts owing between the parties under Section 1 0.3. 1, so that all such amounts are netted or aggregated to a single liquidated amount payable by one party to the other (the "Net Settlement Amount"), At its sole option and without prior Notice to the Defaulting Party, the Non-Defaulting Party may setoff (i) any Not Settlement Amount owed to the Non-Defaulting Party against any margin or other collateral held by it in connection with any Credit Support Obligation relating to the Contract; or (ii) any Net Settlement Amount payable to the Defaulting Party against any amount(s) payable by the Defaulting Party to the Non-Defaulting Party under any other agreement or arrangement between the oarties.

Other Agreement Setoffs Do Not Apply:

10.3.2. The Non-Defaulting Party shall net or aggregate, as appropriate, any and all amounts owing between the parties under Section 10.3. 1, so that all such amounts are netted or aggregated to a single liquidated amount payable by one party to the other (the "Net Settlement Amount"). AI Its sole option and without prior Notice to the Defaulting Party, the Non-Defaulting Party may setoff any Net Settlement Amount owed to the Non-Defaulting Party against any margin or other collateral held by it In connection with any Credit Suooort Obliaation relatina to the Contract.

10.3.3. If any obligation that is to be Included in any netting, aggregation or setoff pursuant to Section 10.3.2 is unascertained, the Non-Defaulting Party may in good faith estimate that obligation and net, aggregate or setoff, as applicable, In respect of the estimate, subject to the Non-Defaulting Party accounting to the Defaulting Party when the obligation is ascertained. Any amount not then due which is included in any netting, aggregation or setoff pursuant to Section 10.3.2 shall be discounted to net present value in a commercially reasonable manner determined by the Non-Defaulting Party.

1 0,4, As soon as practicable after a liquidation, Notice shall be given by the Non-Defaulting Party to the Defaulting Party of the Net Settlement Amount, and whether the Net Settlement Amount is due to or due from the Non-Defaulting Party. The Notice shall include a .written statement explaining in reasonable detail the calculation of such amount, provided that failure to give such Notice shall not

; the validity or enforceability of the liquidation or give rise to any claim by the Defaulting Party against the Non-Defaulting Party. ·. ·' <et Settlement Amount shall be paid by the close of business on the second Business Day following such Notice, which date shall not be earlier than the Early Termination Date. Interest on any unpaid portion of the Net Settlement Amount shall accrue from the date due

Page 7 of 12 LADWP Agreement 96 125-510

LA000514

until the date of payment at a rate equal to the lower of (i) the then-effective prime rate of interest published under "Money Rates" by The Wall Street Journal, plus two percent per annum; or (ii) the maximum applicable lawful interest rate.

10.5. The parties agree that the transactions hereunder constitute a "forward contract" within the meaning of the United States " ··ruptcy Code and thai Buyer and Seller are each "forward contract merchants" within the meaning of the United States Bankruptcy

10.6. The Non-Defaulting Party's remedies under this Section 10 are the sole and exclusive remedies of the Non-Defaulting Party with respect to the occurrence of any Early Termination Date. Each party reserves to itself all other rights, setoffs, counterclaims and other defenses that it is or may be entitled to arising from the Contract.

10.7. With respect to this Section 10, if the parties have executed a separate netting agreement with close-out netting provisions, the terms and conditions therein shall prevail to the extent inconsistent herewith.

SECTION 11. FORCE MAJEURE

11.1. Except with regard to a party's obligation to make payment(s) due under Section 7, Section 10.4, and Imbalance Charges under Section 4, neither party shall be liable to the other for failure to perform a Firm obligation, to the extent such failure was caused by Force Majeure. The term "Force Majeure" as employed herein means any cause not reasonably within the control of the party claiming suspension, as further defined in Section 11.2.

11 .2. Force Majeure shall include, but not be limited to, the following: (i) physical events such as acts of God, landslides, lightning, earthquakes, fires, storms or storm warnings, such as hurricanes, which result in evacuation of the affected area, floods, washouts, explosions, breakage or accident or necessity of repairs to machinery or equipment or lines of pipe; (ii) weather related events, affecting an entire geographic region. such as low temperatures which cause freezing or failure of wells or lines of pipe; (iii) interruption and/or curtailment of Firm transportation and/or storage by Transporters; (lv) acts of others such as strikes, lockouts or other industrial disturbances, riots, sabotage, insurrections or wars; and (v) governmental actions such as necessity for compliance with any court order, law, statute, ordinance, regulation, or policy having the effect of law promulgated by a governmental authority having jurisdiction. Seller and Buyer shall make reasonable efforts to avoid the adverse impacts of a Force Majeure and to resolve the event or occurrence once it has occurred in order to resume performance.

11 . 3. Neither party shall be entitled to the benefit of the provisions of Force Majeure to the extent performance is affected by any or all of the following circumstances: (i) the curtailment of Interruptible or secondary Firm transportation unless primary, in-path, Firm transportation is also curtailed; (ii) the party claiming excuse failed to remedy the condition and to resume the performance of such covenants or obligations with reasonable dispatch; or (iii) economic hardship, to include, without limitation, Seller's ability to sell Gas at a higher or more advantageous price than the Contract Price, Buyer's ablllty to purchase Gas at a lower or more advantageous price than the .'} :ctract Price, or a regulatory agency disallowing, in whole or in part, the pass through of costs resulting from this Agreement; (iv) lhe loss ( ··_·_· ·.- ;yer's market(s) or Buyer's inability to use or resell Gas purchased hereunder, except, in either case, as provided in Section 11.2; or (v) \ ,e; :;bss or failure of Seller's gas supply or depletion of reserves, except, in either case, as provided in Section 11.2. The party claiming Force Majeure shall not be excused from its responsibility for Imbalance Charges.

11.4. Notwithstanding anything to the contrary herein, the parties agree that the settlement of strikes, lockouts or other industrial disturbances shall be within the sole discretion of the party experiencing such disturbance.

11.5. The party whose performance Is prevented by Force Majeure must provide Notice to the other party. Initial Notice may be given orally; however, written Notice with reasonably full particulars of the event or occurrence is required as soon as reasonably possible. Upon providing written Notice of Force Majeure to the other party, the affected party will be relieved of its obligation, from the onset of the Force Majeure event, to make or accept delivery of Gas, as applicable, to the extent and for the duration of Force Majeure, and neither party shall be deemed to have failed in such obligations to the other during such occurrence or event.

11.6. Notwithstanding Sections 11.2 and 11.3, the parties may agree to alternative Force Majeure provisions in a Transaction Confirmation executed in writing by both parties.

SECTION 12. TERM This Contract may be terminated on 30 Day's written Notice, but shall remain in effect until the expiration of the latest Delivery Period of any transaction(s). The rights of either party pursuant to Section 7.6 and Section 10, the obligations to make payment hereunder, and the obligation of either party to indemnify the other, pursuant hereto shall survive the termination of the Base Contract or any transaction.

SECTION 13. LIMITATIONS FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY OR MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY. A PARTY'S LIABILITY HEREUNDER SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION, AND ALL OTHER REMEDIES OR DAMAGES AT lAW OR IN EQUITY ARE WAIVED. IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN OR IN A TRANSACTION, A PARTY'S LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES ONLY. SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, AND ALL OTHER REMEDIES OR DAMAGES AT lAW OR IN EQUITY ARE WAIVED. UNLESS EXPRESSLY HEREIN PROVIDED, NEITHER PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPlARY OR INDIRECT DAMAGES, LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR CONTRACT, UNDER ANY . . :MNITY PROVISION OR OTHERWISE. IT IS THE INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED ON

\, jioDIES AND THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE CAUSE OR CAUSES RElATED THERETO, INCLUDING THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE.

Page 8 of 12 LADWP Agreement 96125-510

LA000515

TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE LIQUIDATED, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO DETERMINE, OR OTHERWISE OBTAINING AN ADEQUATE REMEDY IS INCONVENIENT AND THE DAMAGES CALCULATED HEREUNDER CONSTITUTE A REASONABLE APPROXIMATION OF THE HARM 0" I_OSS.

;'-fiON 14. MISCELLANEOUS 14. 1. This Contract shall be binding upon and inure to the benefit of the successors, assigns, personal representatives, and heirs of the respective parties hereto, and the covenants, conditions, rights and obligations of this Contract shall run for the full term of this Contract. No assignment of this Contract, in whole or in part, will be made without the prior written consent of the non-assigning party (and shall not relieve the assigning party from liability hereunder), which consent will not be unreasonably withheld or delayed; provided, either party may (i) transfer, sell, pledge, encumber, or assign this Contract or the accounts, revenues, or proceeds hereof in connection with any financing or other financial arrangements, or (ii) transfer its interest to any parent or affiliate by assignment, merger or otherwise without the prior approval of the other party. Upon any such assignment, transfer and assumption, the transferor shall remain principally liable for and shall not be relieved of or discharged from any obligations hereunder.

14.2. If any provision in this Contract is determined to be invalid, void or unenforceable by any court having jurisdiction, such determination shall not invalidate, void, or make unenforceable any other provision, agreement or covenant of this Contract.

14,3, No waiver of any breach of this Contract shall be held to be a waiver of any other or subsequent breach.

14.4. This Contract sets forth all understandings between the parties respecting each transaction subject hereto, and any prior contracts, understandings and representations, whether oral or written, relating to such transactions are merged into and superseded by this Contract and any effective transaction(s). This Contract may be amended only by a writing executed by both parties.

14.5, The interpretation and performance of this Contract shall be governed by the laws of the jurisdiction as indicated on the Base Contract, excluding, however, any conflict of laws rule which would apply the law of another jurisdiction.

14.6. This Contract and all provisions herein will be subject to all applicable and valid statutes, rules, orders and regulations of any governmental authority having jurisdiction over the parties, their facilities, or Gas supply, this Contract or transaction or any provisions thereof.

14.7. There Is no third party beneficiary to this Contract.

14.8. Each party to this Contract represents and warrants that it has full and complete authority to enter into and perform this Contract. Each person who executes this Contract on behalf of either party represents and warrants that it has full and complete authority to do so and that such party wm be bound thereby.

14.9, The headings and subheadings contained in this Contract are used solely for convenience and do not constitute a part of this ;'\':c'.,1act between the parties and shall not be used to construe or interpret the provisions of this Contract. l -·---:-·.1 \---:/0, Unless the parties have elected on the Base Contract not to make this Section 14.10 applicable to this Contract, neither party shall disclose directly or indirectly without the prior writlen consent of the other party the terms of any transaction to a third party (other than the employees, lenders, royalty owners, counsel, accountants and other agents of the party, or prospective purchasers of all or substantially all of a party's assets or of any rights under this Contract, provided such persons shall have agroed to keep such terrns confidential) except (i) in order to comply with any applicable law, order, regulation, or exchange rule, (ii) to the extent necessary for the enforcement of this Contract , (iii) to the extent necessary to implement any transaction, or (lv) to the extent such information Is delivered to such third party for the sole puJpOse of calculating a published index. Each party shall notify the other party of any proceeding of whicih it is aware which may result in disclosure of the tenns of any transaction (other than as permitted hereunder) and use reasonable efforts to prevent or limit the disclosure. The existence of this Contract is not subject to this confidentiality obligation. Subject to Section 13, the parties shall be entitled to all remedies available at law or in equity to enforce, or seek relief in connection with this confidentiality obligation. The terms of any transaction hereunder shall be kept confidential by the parties hereto for one year from the expiration of the transaction.

In the event that disclosure is required by a governmental body or applicable law, the party subject to such requirement may disclose the material terms of this Contract to the extent so required, but shall promptly notify the other party, prior to disclosure, and shall cooperate (consistent with the disclosing party's legal obligations) with the other party's efforts to obtain protective orders or similar restraints with respect to such disclosure at the expense of the other party.

14.11 The parties may agree to dispute resolution procedures in Special Provisions attached to the Base Contract or in a Transaction Confirmation executed in writing by both parties.

DISCLAIMER: The purposes of this Contract are to fad!itate trade, avoid misunderstandings and make more deflnlte the tenns of contracts of purchase and sale of natural gas. Further, NAESB does not mandate lhe use of lhis Contract by any party. NAESB DISCLAIMS AND EXCLUDES, AND ANY USER OF THIS CONTRACT ACKNOWLEDGES AND AGREES TO NAESB'S DISCLAIMER OF, ANY AND ALL WARRANTlES, CONDITIONS OR REPRESENTATIONS, EXPRESS OR IMPLIED, ORAL OR WRtnEN, WITH RESPECT TO THIS CONTRACT OR ANY PART THEREOF,INCLUDING ANY AND ALL IMPLIED WARRANTIES OR CONDITlONS OF TlTLE, NON·INFRINGEMEfoiT, MERCHANTABILilY, OR FITNESS OR SUITABILilY FOR ANY PARTICULAR PURPOSE (WHETHER OR NOT NAESB KNOWS, HAS REASON TO KNOW, HAS BEEN ADVISED, OR IS OlliERWISE IN FACT AWARE OF ANY SUCH

_.r:. -;'~OSE), WHETHER ALLEGED TO ARISE BY LAW, BY REASON OF CUSTOM OR USAGE IN THE TRADE, OR BY COURSE OF DEALING. EACH 1 .· -.•... , OF THIS CONTRACT ALSO AGREES THAT UNDER NO CIRCUMSTANCES WILL NAESB BE LIABLE FOR ANY DIRECT, SPECIAL, INCIDENTAL, \c.: ... ~PLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES ARISING OUT OF ANY USE OF THIS CONTRACT.

Page 9 of 12 LADWPAgreement 96125-510

LA000516

' I

Lelterhead/Logo

TRANSACTION CONFIRMATION FOR IMMEDIATE DELIVERY

Date:

EXHIBIT A

-- Tran Confirmation#:

This Transaction Confirmation Is subject to the Base Contract between Seller and Buyer dated The t this Transaction Confirmation are binding unless disputed in writing within 2 Business Days of receipt unless otherwise specified in Base Contract.

SELLER: BUYER:

Attn: Attn: Phone: Phone: Fax: Fax: Base Contract No. Base Contract No. Transporter: Transporter: Transporter Contract Number: Transporter Contract Number:

Contract Price: $ /MMBtu or

Delivery Period: Begin: End:

Performance Obligation and Contract Quantity: (Select One)

Firm (Fixed Quantity): Firm (Variable Quantity): Interruptible:

·_ MMBtus/day MMBtus/day Minimum Up to __ MMBtus/day

-_:_-:-~ EFP MMBtus/day Maximum

subject to Section 4.2. at election of

o Buyer or n Seller

Delivery Point(s):

(If a pooling point is used, list a specific geographic and pipeline location):

Special Conditions:

Seller: Buyer:

By: By:

Title: Title:

Date: Date:

Page 10 of 12 LADWP Agreement 96125-510

LA000517

SPECIAL PROVISIONS- FIVE YEAR NAESB

SECTION 1. PURPOSES AND PROCEDURES '

·Section 1.1.1. is added as follows:

The intent of this agreement is for the LADWP to buy natural gas for a term no longer than five years, in accordance with City of Los Angeles Administrative Code Section 1 0.5.3. This agreement is valid for five years from the date of execution and will automatically terminate at the end of the five years. All commitments under this agreement will be honored even if they fall outside the expiration of this agreement.

Written Transaction Procedure:

Section 1.2 The last sentence of this section is deleted, and replaced with the following: "The parties acknowledge that their agreement will not be binding until the exchange of non-conflicting Transaction Confirmations."

Sectlon1.3 This section is deleted

Section 3.3 This section is deleted .

. : .. "Section 3.4 iThis section is deleted.

Section 8.3 This section is deleted and replaced with the following: "Seller agrees to indemnify Buyer and save it harmless from all losses, liabilities or claims including reasonable attorneys' fees and costs of court ("Claims"), from any and all persons, arising from or out of claims of title, personal injury or property damage from said Gas or other charges thereon which attach before tiHe passes to Buyer."

SECTION 10. FINANCIAL RESPONSIBILITY

Section 10.4 is deleted. And replaced with the following: "As soon as practicable after a liquidation, Notice shall be given by the Non-Defaulting Party to the Defaulting Party of the Net Settlement Amount, and whether the Net Settlement Amount is due to or due from the Non-Defaulting Party. The Notice shall include a written statement explaining In reasonable detail the calculation of such amount, provided that failure to give such Notice shall not affect the validity or enforceability of the liquidation or give rise to any claim by the Defaulting Party against the Non-Defaulting Party. The Net Settlement Amount shall be paid by the close of business on the fifth Business Day following such

Notice, which date shall not be earlier than the Early Termination Dale. Interest on any unpaid portion of the Net Settlement Amount shall accrue from the date due until the date of payment at a rate equal to the lower of (i) the then-effective pnme rate of interest published under "Money Rates" by The Wall Street Journal, plus two percent per annum; or (ii) the maximum applicable lawful interest rate."

SECTION 11.6. This section is deleted.

SECTION 12. TERM

This section is deleted and replaced with the following: ''This contract is for a duration of five years and will automatically terminate five years from the date of execution by the LADWP. However, this Contract may be terminated earlier by either party upon 30 Day's written Notice, without cause, but shall remain in effect until the expiration of the latest Delivery Period of any transaction(s). The rights of either party pursuant to Section 7.6 and Section 10, the obligations to make payment hereunder, and the obligation of either party to indemnify the other, pursuant hereto shall survive the termination of the Base Contract or any transaction."

SECTION 14.5. CHOICE OF LAW

This Agreement will be governed by and construed, interpreted, and enforced in accordance with the laws of the state of Texas, without regard or reference to the choice of law doctrine, with the exception that the laws of the State of California relating to governmental immunities and the authority of the LADWP to execute and perform its obligations under this Agreement shall apply.

Each party agrees that any action in connection with this Agreement may be commenced in any court of competent jurisdiction in the County of Los Angeles in the State of California and each party waives any objections on the basis of forum non-convenience or otherwise with respect to the venue of any such action being heard in Los Angeles, California.

Section 14.11 This section is deleted and replaced with the following: "Each Party was represented by legal counsel during the negotiation and execution of this Agreement."

Page 11 of 12 LADWPAgreement 96125-510

LA000518

IN WITNESS WHEREOF, the parties hereto have executed the Base Contract and these Special Conditions together .

. .• ·'city of Los Angeles Acting By and For the Department of Water and Powor ("LADWP"l

Name: Aram H. Benyamin

Title: Acting. ·senior Ass"istant General Manager, Power System

Coral Energy Resources. L.P. Party Name

A(__. '// . By .f-2'"4 L~'0t1/J--o--Name [j,_jl. ~w'l"""

Title: S r- VIii.- f (it,.j,;.

BY __ 'D'"IRW'"·>fi.1JROERSMI\­,'\)epu1y City A.rtom~:t

Page 12 of 12 LADWP Agreement 96 125-510

LA000519

-

Attachment 3

TRANSACTION CONFIRMATION FOR IMMEDIATE DELIVERY

EXHIBIT A

Shell Energy Norte America (US), L.P. Effective Date: August 1. 2009

This Tmnsactlon ConflrmaUon Is StJbject to tile NAESB Base Contract between Soller and Buyer datoo February 1 2008. Tho terms of this Transaction Confirmation shall be binding upon exocuUon by tho parties.

SELLER: BUYER: Shall Energy North America (US). L.P. ("Sholl Energy") Los Angelos Department of Water and Power ("LADWP") 909 Fannin, Plaza Level One Energy Control Center Houston, Texas 77010 111 North Hope S1reet, Room 1148 Attn: Contract Administration Los Angelas, CA 90012 Phone: 713.767.5400 Attn: Brad Packer Fax: 713.265.2171 Phone: 818-771-6555 Base Contract No. 010-NG.BS.08129 Fax: 818-771·8510

Transpoder: Kem River Gas Transmission Company Transporter Contract Numbers: 1706,1008

Contract Prlco: Flxad ~rtce:

a) The Contract Price is $9.80 par MMBtu for the quantity documented as Renewable Biomethane rRB") as metered and delivered from 1he designated Lancffill(s) (see Attachment A) on a monthly basts.

b) The Contract Price Is $5.80 per MMBtu for 1he quanuty delivered of Standard Baseload gas on a monthly basis that is in -excess of documented mo1orad and delivered RB gas from designated Landflll(s).

DeliVery Porlod: llegln: August 1, 2009 End: June 30, 2014

Performance Obligation and Contract Quantity: Seller shall sell to Buyer, and Buyer shall purchase from Seller, 3,500 MMBtu per Day for August 1, 2009 through August 31, 2009 and 8,200 MMBtu per Day tor September 1, 2009 through June 30, 2014 reontract Quantity") consisting of both RB and Standard Baseload gas as sat 1orth In the Special Conditions. Setter agrees to dedicate solely to Buyer all of the RB that Setter has contracted for with the dasiQnafed landfills set forth in Attachment A as of the EllecUve Date of tl11s Transaction Confirmation up to 1M Contract Quantity hereof. Seller 1urther agrees that all deliveries of RB received by Seller under said contracts with tho doslgnated landfills shall be delivered to Buyer under this Transaction Confirmation up to the Contract Quantity. Notwithstanding the foregoing, Buyer and Seller acknowledge and agree that RB Is Interruptible and Is subject to the succassful flow of scheduled RB from the facility".

DuMng t11e Delivery Period hereunder, Seller may offer to Buyer and Buyer may agrae to purchase supplementary volumes of RB f[()n'l an additional landfill facility that Is qualified and approved by Seller. Such additional RB volumes would ba set forth In an Attachment 'A'1o this Transaction ConflnmaUon.

Firm (Fixed Quantity): Firm (Variable Quantity): lnterrupUbto:

!XI MMBtus/Day ___ MMBtus/Day Minimum Up to ( l MMBtus/Day

0 EFP ___ MMBtus/Day Maximum , ..

Delivery Potnl(s): Opal

Special Conditions: ' General T!l!J!!! gnd CondiUons and D&flnltlons:

11Projacr' means any of the four landfill source facilities sat forth In Attachment A to the TransacUon Confirmation hereof.

"Renewable Blomelhane" ("RB"): means gas produced from the Profect that:

-LA000520

Attachment 3

(i) consists of Landflll Gas, as that term Is deflned in the Cal~omla Energy Commission's ("CEC') Renewable Energy Program Overall Program Guidebook (January 2008); and

(II) contains ell the environmental aUrlbutes sssoclated with the use of Landfill Gas-denved fuel for the generation of electric power, but e.cluding (a) any federal or state tax credits associated with the collection, producUon, transfer or sale of such landfill Gas, (b) any emission reduction credits required or available for the operation of a LandHII Gas processing facility at the Landfill I to collect and process Landfill Gas, and (c) any credil8 or payments associated willllhe reduction In or avoidance of Greenhouse Gas emissions at the Landflll, Including emission reduction cfl>dits, vertfled eml .. ton raductlons, voluntary emission reduc1lons, · 'j offsets, allowances, voluntary cartbon unHs, avoided compliance costs, emission rtghts and aulhorlzatlons, and C02 raducllon and saquestratlon. For purposes hereof, "Greenhouse Gas' means cerllon dioXIde (C02), methane (CH4), nHrous oxide (N20), hydrofluorocarllons, parnuorocarllons, sulphur hexafluo~de, or any other substance or combination of substances that may become regulated or designated ao Greenhouse Gases under any federal, stata or local law or regulation, or any emission reduction registry, trading system, or reporting or reduction program for Greenhouse Gas emission reductions !halls established, cartlfiad, maintained, or recognized by any International, governmental (Including U.N., federal, stata, or local agencies), or non.. govsmmental agency from ~me to time, In each case measured In Increments of one metric tonne of carllon dioxide equivalent.

Standard Baseload gas Is the pcslttve difference between the total gas delivery and the RB delivered each month.

The Parties acknowledge tlu!t RB, as defined herein, Is a qualifying resource under the Buyers Renewable Portfolio Standard ('RPS") program In effect as of the execution date of this Transaction Confirmation, and norther Party makes any further representation in th_is regard.

Seller's Support of Bu)Alr'o RPS Program: Seller will provide an attestation identifying the specific landfill souroe, stating the RB source is Landfill Gaa,lllat the RB is injected Into a pipeline at the landfill snd is measured in BTU's. The parties understand thallhls RB will be delivered to Buyer through an exchange rather than through dimct long.haul transportation. Specifically, !hard environmental attributes will ba unbundled from the gas at or near the JandHII source, and the resulting gas without environmental attributes will be sold by Seller In the loCal market. Tho gao will be replaced willl an equal volume of gas and be re·bundled with the environmental attributes for delivery to Buyer at tha specified Dallvery Point as RB. Seller shall provide any additional documontatlon or information related to the supply of RB, to the Buyer, as reasonably required to support Buyer's ongoing repcrtlng compliance with Buye(s RPS program.

If the CEC, through its Renewable Energy Program Overall Program Guidebook (January 2008) or by other means aHers Its rules or guidelines for renewables compliance and disallows any or all of the RB facllllles under this Transaction connnmatlon, sucll actlon shall neither excuse Buyer from performance of its obligation hereunder nor give rise to any right of Buyer to a refund or any retroactive adjustment of tho Contract Price hereof.

Roporto, lnvolcet~ and Statement$: Seller agrees to provide Buyer with a Monthly statement showing the amount of RB as meterad from the Individual landfill facilities along with I he Standard Baseload gas compr1slng the previous Month's deliveries.

ller: Sh&ll Energy North America (US), L.P.

_::fJ

Date:

-LA000521

Attachment-A

(1) Rumpke Sanitary Landfill, located in Cincinnati, OH. (2) Fort Smith Landfill, located In Fort Smith, AR. (3) Greenwood Farms Landfill, located in Tyler, TX. (4) Jefferson Davis Parish Sanitary Landfill, located in Welsh, LA.

Attachment 3

·'

-LA000522

... •-.. ,··

Attachment 3

Attachment-S

Seller Representation and Wammtvs

Seller represents, warrants and covenants to Buyer that Seller has for the purposes of supplying Buyer under the terms and conditions of this Transaction Confirmation entered Into NAESB Base Contracts for the Sale and Purchase of Natural Gas and RB with all of the four landfill facilities, for the dedicated output of RB listed in Attachment A hereof:

• Cambrian Energy I South Tex-Fort Smith Treaters, LLC effective July 21, 2009 • JDP Renewables, LLC effective July 24, 2009 • East Texas Renewables, LLC effective July 24, 2009 • GSF Energy, LLC effective July 23, 2009

Buy!lr , .. ;ts ~~ed

·:-:·t;-'.:Jr ... !~;

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-LA000523

First Amendment to Transaction Confirmation executed Jnly 27, 2009

betWeen Shell Energy North America (US), L.P.

and Los Angeles Department of Water and Power

Attachment 4

This First Amendment to the Transaction Confirmation ("First Amendment") is made and entered into this 251

b day of August 2009 by and between Shell Energy North America (US), L.P. ("Shell Energy''), and Los Angeles Department of Water and Power ("LADWP"). Shell Energy and LADWP are hereinafter sometimes referred to individually as a "Party'' and sometimes collectively referred to as the "Parties".

WHEREAS, LADWP and Shell Energy entered into that certain Base Contract for Sale and Purchase of Natural Gas dated February 1, 2008 (the "Base Contract"); and

WHEREAS, the Parties entered into that certain Transaction Confirmation executed by the Parties on July 27, 2009 to be effective August I, 2009 (the "Confmnation"); and

WHEREAS, the Parties now desire to amend the Confirmation in certain respects.

NOW, THEREFORE, in consideration of the premises and the agreements herein contained, the Parties agree to amend the Confirmation as follows:

REVISED PROVISIONS:

1. "Attachment C" - The Confirmation is amended by adding a new "Attachment C" attached hereto, and titled as Additional Landfill Facilities.

2. Performance Obligation and Contract Quantity. Delete the last sentence of the second paragraph in its entirety and replace with the following:

"Any additional landfill facility shall be either added to Attachment 'A' or set forth on Attachment 'C' if additional special provisions are applicable.

As amended herein, the obligations and rights under the Confirmation shall remain in full force and effect.

IN WITNESS WHEREOF, the Parties hereto have executed this First Amendment on the date set forth above, but effective as of the effective date of the Confmnation.

America (US), L.P.

Page 1 of2

LA000524

-·----~~--

Attachment 4

Attachment C

. Additional Landfill Facilities

(1) Jolmson County Landfill, located in or near Shawnee, KS.

The following Special Provisions are appUcable to the RB sourced from the Johnson County Landfill:

A, Performance Obligation: Buyer shall purchase any and aU RB that Seller may deliver to Buyer.

B. Contract Price: The Contract Price shall be as stated in the Confirmation, notwithstanding the reference to Attachment A or designated landfills.

C. Definition of Renewable Biomethane (''RB''): RB means Gas produced from the Jolmson County Landfill containing all Environmental Attributes, as defined in the attached Attestation.

Page 2 of2

LA000525

Attachment 4

LANDFILL GASPRODUCJ!RATI'ESTA'l10N

(ElF XC Lan4fl/1 Gtu, LLC. awn.r (rmdlor l.r aulhoriud ag011t qf) ths FacUlty

and 11/u th• Etwlronmtntui.I.IJrlbU/u dtlwt/y .from the Facility to huogrys Enugy Smlcu)

ElF KC Landfill Gas, LLC ("Seller") attests that it has sold and conveyed to

L . ~-0. W , P ("Buyer") the Environmen1al.Attributes (u ~below)~ with

the Landfill Gas (detinod below) dollwrcd pllllluallt to that ccrtaln Transaction Confinnstion

llllder a NAESB ~ Contract bctweP.n SeUer and BU)'1lr dated J~ 2008 ("Transaction

Confumalion"), to the Delivery Points (defined below) during tho Delivery Period specified

below in this &Uestation.

N11110ofFaolllty: BIF KC LandflD-to-Ou Bnergy Pro~ (the "Facility")

Address ofFaoillty: A4Jaoentto Jolwoo Coun\Y LandfiJJ, Shawnoo, Kansas

Idootltl<:atlon Numbera: (I) DOB BIA (lfappllellbl6): (U)

ConiiW! Penon: JORt A. Tornos-Monllor Tlao:

Tolopbooo: ----~.~IS.:-:3:-:1~0-0~5:::2~7 ---- Fax: -4-IS-.J-B-0-0-53_1 ___ _

Owner ofPaoillty: BIF KC LlndftU Oas, LLC

Opcnllor ofl'ltclley: BIF KC LlndftU Oas, LLC

Au1horlzedAgentofF~: ("Seeler")

L.A.!l.W .fl~ ("Buyer" or "Wboloulo!") .. •,

?7' .. 'f¢,=·:; .:~~·.4.:-. ,.

:1£'1, ,!>It [7'/~,J,r o.o • o.o· m.os·

I i.au<liiUPJ dollvonod otlho Dollvey Pololllllltftoodloplpolfno qualtly PJspocllicatlons ofQueo!Pip.U... tmilf. '-· ./ . 2 (Sot filolnollll)' 3 lluyw'• ulliolaul cooibulllou oflalldftllpo aftorclollvey BllhoDollvay Poiallw!D be equlvaiOilliO oombul!ioo ofplptlloo quollty -.J au. whkh, ... ordlna to 1he u.s. Bnllll!Y lniWnlBIIoo AdmlnlaC>allon ("""'.olo.doe.&ov). wiD """It In ov....., omiallon.s of 117.080 lb.! of C02 per MMBm ofllllldftll ps couumod.

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LA000526

Attachment 4

~~eW'illlle~l~. IIO!re~i1/ii!H'ot(IUI!torized apnt of lite Faolllty) (ownen'opnlor

of tho F..UIIy). deolanllhat tho lnformatioa provided 0111hl1 form It COIIIIQ\t wllb balh lbe FICIIII)"I

ond Owner/Oplnlor'a blllfDell reoordlond Ia true ondoomct to tho bat ofmyknowledp.

I fllrtbor deoln that: 0} til• Seller bu tho lepl rfsbtllld title to 10ll llld 1rBnllc:l upoa tho

EIIViromnental Atlrlbulal (u deliDOd below); (ll} darlna tho Dollvety Poriod, tho FaciHty produood tho

Dlh ofLondtlll Ou ldarltlllod above (IUOII Dtba ofLondfill Ou, "Prod~ 0..") and tho EnvboBmontal

A1tribulol ...,.latod wllb aucb Produoed Gu; (IU) t!ud lucb ~ 0.. wu 1101 aaod for OIHitD

COliiUIIIplioo, 11ared, orwu odlenrlilo 1101 fiVooted in1o tho Dollvezy PoiD1I tOr delivery to 1bo llllya; ("rv)

thot tucb Produood Ga wu acooplod for RMiollvery litho DeUVOI)I Poldll by tho llllya; aud, (v) tho

Buyer bu aa-1. In writlq. that II ohaU not ead bu 1101 IIUido ony ~ ct olalm 1hat IUilh

Produced Ou Ia l'elleWiblo or otborwlao cavhaunoatally pnb!jnobJe.

I filrlhor doolare, with roprd to the l!nviJallnoulal AllrihuW w.rtlfled llld aol4/oonveyed

bemmder llld horeby, thot: (I) tho &viroonlelltal Attribullll hive aot boou, ead shall nat II Ill)' time

~ UDIJ1 tho expiration otlho applicablo Delivery Porlod be IO!dlconveyed, to lilY per10n ct enlily

other llwl the Buyer hereuader; (li} the Brlvlronmutal AttrtbuM baVI not"- eoldiOOIIVeyed olber 1ban

p111'11111rt to 1ho NAI!SB Trwacllon Coufilmal!al between Buyer .nd Selllr dtled 111110 '311. 2008

("Tru.JJodoo Cooflmlllloa"}, .nd lhiiiiiOIIIIIl)l time bonllllor 1111111 tho oorplratim of the appl~

Dollv«yPorlod be aold, clllmed, or NJA~ u partoflll)loulpU!Dr lllel, ctothorwloe UHd to lllliiiY ony .-blo IIIOI'i)' or emillloaJ obllptlon 111111«111)1 r-...blo podlbllo ll1ludltd or eiiiOWbere under

lilY IIADdard. mutetplaoe, or juriocllolloo; (IU) tho Bnvtroamontal Allribulol "'blto to tho ceptoro,

prodw:&u. purolluo. or use of Procluoed Gu and nil olher au; (lv) tho Envitoomeatal Altrlbula lhlll

Include tho right of tho npordiiJ penon Of eatity to R!pOrt lhlt It OWIII tho Bllvlroameutal Altrtbutei: (I)

to aoy ~p~~oy, authority or Olbor ~ under IllY aDislono 1n11inJ or ..,.,nlng Jmlllllll, public or

~ wblcb ogoaay, udhorlty orotbor ~ lbat bujlllildkdm ovar ct olberwile ...-or miews

tho ooli.- of ouoh penon. and (b) to - ... or ]!Oiolldll oua-.fbr tho puqx>111 of mllkollna aud advectlllna; (v) all Eovironmtr1111 AUrlbutet, ail OWBOI1hlp lmer.et lhereiD, and all dsht, tide ond

o1her ~ thonco all ba ooldloonveyed under tho 1'riDaotloll Con1lnulllon ond baby he and

oloar of111y lillnl end eucumbroncel wiWiooYer, ud, (vi) Soller hu tho Joaal Tfaht to cllhu, 101~ 1rBnllc:l

to ...U, ond lnnll'tr under tho Trausoolloo Confirmalloll all ofll>e &vitoom«<lll Allribul"' (IDOiudlns oil

uooolatedript, dtlo and lnlemlllloroln llld thorelo}.

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LA000527

Attachment 4

"Environmental Atl.rlbules" means: (A) any and all fuo~ omi&iions. air quality or other environmonml

~ cndlta, benelitl, reductions, ~ and allowanco& asaoolatod with or resulllng !1om the

captnn>, production, purchue, or uao ofPnijoot au. or the avoidanoo oflho omln!on of any gu, cbomlcal

or other substanco to lhe alr,aoU or water lll!n'butable to IUOb oapturo, praduclion, purchalo, or uao.; or

(B) any and all cllaraoleriBtlo c1111111!,·benoffls, redootions, olftels and alloWIIIIoouuoola!ed with or ·

rosult!ng tiom lho Project Ou bolna treated u bl01111101, lllimal WU1ol, Oli1er Willi> rnatorlala, or as the

product ofdigesllon ofanbna!WllliiDs or othorwtiB!emataials; nsanJless ofwholht.r any liUOb

ch111110111ri.sti on>dit, bonofit. rcduotion, oll!!ol or allowancoln (A) or (B) II creall!d by contract or ariaoo

out of any law, rule or fO&U)fllion; provided, howovor,1ho tom "l!llviromnental Allribntes" sboll oxclude

(x) any IBX-rolab>d attrlb\mls, including wilhootlbnl1a!ion lilY and allata!ol!ld federal production lax

credlll, any Investment lax crcdils, lax inoeutlves or taX snnts. any other tn credits, and tax lncoatives or

lax 1!1'11111 which oro or will be s-ra11>c1 or etKned by tho pnxluotioo or capture of Project Ou from a

landfllJ, and (y) any crcdill avalloblo for dootruotlon of motlwlo, Cllbon dioxide, ultmna oxide,

hydrofluorocarbons, porflnomcarboas. sulphur bexafluorlde, or any olbor ar-houe- that""' or

will be senate<~ by tho Clpturo (or poc!uodoo)and dOi!ruCI!on(or 1110) ofl'rqject Ou or any oth ... -

from alaodflll. For tho avoidance of doubt, Envirorunontal Allribulls sbolllncludo, but nat be llln!Wd to:

(I) thoaethll ~ otOI1ed byrogulltiOIIB, ltltUiel, or olbtr aovornmematiiCtloD and (2) lhoaolhat C.ID be

u.odtn: (a) clabn roaponalblllty fur tbo rcducdoo ofllmlalon~ltldlor Pollulmtl (u defined below). (b)

cleim OWI!"I'Ihip ofthol3misaions and/or Foil~ and auoclaled reducCion rlshU. and (o) claim

rcspcnslbllity furlha avoidence of the Bmlsalons aod/or PoHutanll.

"EmiQIOllllllldlor Pollutanll" mean~, except 1u tho- oxoludod tiom tha deliuiti<m of."l!nvironmanlal

Al!rlbul.oo" above, any and all a1r quaUiy or other Oll'(lroumootal chara<>lorlstlcsiBIOCiab>d with tho

oapturo, produel!on, pw-c~ or uao ofProjoot Oat, lncludlug. wllhout J!mlllltlon, aold rain preouraor8,

carbou dlnxlch!. caroon moooxldo, chlorloatod ~ ... _,oouae- morcury, motaiJ. mathono

(oapturo and uae), nltropn, oxldu, ~ .Ompouudl, """"' precunara, parlioulato IIUII!Dr,

BUitbrdloxldo, toxic alrpol"'-, othorcaroon IIJd aultllr oompounda, 111d llmllarpoU- or

oonlamlnan!s ofoir, watw or acU, under any JOVliiiiiiiOIII rogololory orvolllllllly prnaram,lneludlag

but not Ibn lied 10 the ~ Nellona Frtmowod< Convention ou Cllmlta Cbasljo 8lld rolatod Kyoto

Protocol or any Oilier PfOJI'IIII·

"Laudlill Ou" meona tho i8S senera1ec1 from !he fUUI'l'Oblc dlgeotloo by mCIII1anopllo boolaia of rolltoo

and other aclld was~ .. depollliAod in JliiU1my la\ldlllls, tho contpo~idon of which B8S varies, but usuallY contains melhano In lho nnge of 40% to 60% by volume, and small pon:enllgel of hydrogen ru!fida,

3

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LA000528

Attachment 4

"Piptllo" .._.Quoit Plpollaet (KPC).

"Dee!wry Poimo" DIIIDI (I) "Dollvwy PoiJit A," liuillt ill do&nod u!lle point ofholaOOiiiMIL>n ~

!lie pii>Kfua plpoUne flollll* ofS.Uouacl!lle ~ plpellu flallillel cfl'lpeUM, wlllch llloolled

lltPipo!IDM' ~SIIIIolll: 3604761n Zollo3;MolorN.me: W-Ou 8111ico#l; locllod lnSeoUon I,

TCJMIIIUp 128, bnp231!,1olmlan Coua!y, Ksas; ODd (U) "DooiYUy PvllltB, •wbiob iadol!Md ua.. polatoflmwh-.doabetwtoanlbt~plpellno~offlolloroacl111e~

plpoliao ftlcllltlll ofO'Domloll.t. Smuo Coaoltucl!on C!>. ("ODSC'), wldchlo ~It Sollar'•­

lidllty 1.-llllllloolillt Ill the PIOII~ In 1om-~. Kauau.

otllw'IS(polln: 4 r. Oftioa'INome: AI, ~ ,..,.....

o.te: 1( Vf ( 0 'I

Tile lllllr ...... 1111 IUidel a.at llllldlcaaliola pmlobol t. tloll A....,...• .., bo uod 1IJ L ,P..,. 0. W , P, · oc! .._, fg 1•1 ... ,..._. '"" .... ., u.s. ~tal

1'1111 ., ... Jipll/!f 1M 111e C.... llr ._..., Bollllau, to....,...... lllldlor wrlfJ,.. _...,.., ...... _,....,U.wrl' ~oudlor,...._pleetiw .W..wldt I'Mpllf*>llll

b¥1 .......... A1lrlkM oriQolloolll> Mnbi•.'

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J LA000529

LANDJilLLGASPRODtiCUA'ITISTAnON •

(ElF IrolAtifll/lGtu, LLC, """"(and/DI' It tllll1tarlud "8flll !'/)1M FIJCIJity

<WI uU. tho BKvltomrttnld ~~ diHcJ1y from IJro Facility to L ~ 1\. tl. W • t?

BIF KC Landfill OU, LLC ("Seller'') atles1a 1bat It has sold and conveyed 10

Attachment 4

L , 1\ . 1) . W . f' . ("Buyor") the Environmental Attributes (u defined below) auoelated with

the Landfill 0u (defined below) clcllverod )lW'SIIIDI 10 that certain 1'rlnsacticm ConfirmatlOll

under a NAE8B Base Conlnlct betw= Seller lllld bu)'Cl' dated Juoe ~ 2008 r'I'mmaatlou Confumatlon"), 10 the Oelively Points (dellned below) during the Dclivay Period specified

below In this atte8tallon.

N1111o ofPacDity: B1J1 KC Landfill-fo.Gu llnerJiy Prqjeot

~ ofFacility: A4Jaoent 10 Johnlon Co1Jzey LllldfiU, Sbavmoe, IWiu

Ideat!flcatloll Numbers: (i)DOBI!IA (ifappUoablo): ('u')

Contact l'«<on: Jote A. To,....Monllor Tl1lo: ------T•lopbouo: 415-310-4)$27 Pllt! 415..:!80-0531

Owner ofl'aotuty: Bll' ICC LllldfiU 0111, LLC

()peril or of F10Uity: Bll' KC Lllldfill 0111, LLC

Aulhorilod Agent ofFooUity: ..l("Se"-""'i~ler")!...L-____________ _

L . " .IJ . w. r ~ ("Buy«" Cl' "Whol..aler") ··-

Pld'J)J>o Copoollf -("Ddd')ol DoiiN7 -..-... - Opo1llal -t.odii!Ou - ...,._,._ ~·. 1 mo),

("Ddi') llMo -· .. (I!I(IC1IIIli3AilOI1MII) _,_ IIIli I """ I""' fLiiil!lll1!'• 1, 1'1, ~ .J'- l'fQ~i:~ o.o• -, 0,0' -r m.os·

,( ;I

I Laodflllpa dollviRd ot1bc Dellvay l'olnllllldslles lhe pfpelloo quallly pupeofllootblo of QuOit Pipe liDos torUf. 2 {Bcof-1) . 3 illzyor'o ul!lmolo colllhuotioo offandflll,.. afterdoH""Yat1hoDollveey l'ol!dlwllll>o equivolootlocombuolion ofP\>IIlHquallly1111Ur11 .... wh!ab,11CCC1'11Jn& 101U U.S.I!nclf lolbrmatlon Admtnlollallon {www.ela.doe.p), wlll result lnavenp omlulou of117.0BO lbsofC02 porMMBlu oflandftllpo OOilltiOled. .

LA000530

Attachment 4 ·-· --··-····--·-·· ····----------

RopmonudOJI:~~~e':. 1 V1a Plt<>c~ o~ r, ~-~die'"P'wloil•o of( otll!e-Ficltlty){ownerfopcnlllr

<1f tho FacUlty), ~ tho! d!e lnf'onnal!oll pcoyld<d on thla flxm It COIIIIrtent with bo1h the Facllll)l'a

and OwnoriOpenror'• buainels I'OCOl'dlll!ld I• true llld corroot to the beat of my knowlodao. I 1ill1her deolare that: (I) tho Soller blithe lepl rl&bt and dde to eel! llld 1r1DUct upon the

Enviroamental Atlributel (u dellao!l below); (II) durlna the DoUv.y Period, the FocWty producod tho

Dth ofLindfill Ou ldellllfiochbovo (ouch Dths ofLindiiU Gu, "Ptodnood Oaa")and tho Envill>llJI1011111

AUrlbuces o-""'"d with IUCb Ptod.ood 011; ('dl) thet IUCb Proc!-.1 0.. wu DOt uaod fill' on-silo

COilS(Imption, flarod, or was othcrwiJe DOt iqJocfled IIIIo tlto Do lively Poin!l lilt dellveoy to the Buyw; (iv)

thllauch Produood Ou wu ~ fill' tHelively litho Delivery Poiala by tho Buyer; llld, (v) !be

Buyer hat opood, In wrldna. d!lllt obaiJ DOt ll!ld bas nat modo ouy I8(niiCII11tion or Glalm lhiiiUCb

Produced Ou Is !Oin'lblo orolborwloe ~ IVItlluable. I ilu1her doolaro, wlth noprd to tho l!nviraamen1ll AUrlblltu ldeutlflod and oold/O!Ac..oyoci

h<nuDclor llld bnby, llill: (I) tho l!nvbolllnaalol AllribuiN have DOt been, and ohall DOt llouy tlmo

t-aw uatlt lbe expiration oflbe appllcoblt Dolively l'trlod be oolcVO!Aweyld. to lilY penon or eallty

olh. thin !be BII)'W 11-..der; (h') !he~ Allribm. have nat boon 10Jd/couvoyed clber thin

pqiiUIIl1 to lbe NAJ!SB Trwac1lon C<xlftrmatlal between Buytr and Soller dl!8d Jw3Q. 2008

("'l'rrnniCCIGII CoDftnnatlon"), and lball aot lllftY tlmo beoedla- unlit tho cap!nlloa of !be ~pplloablo

Dollveoy Period be 101d, clelmed, or ••JiiMdlhl uputofouy output or Aloe, orOihcwile uaod to lllilfY lilY notWablo -s,y or emlalooa obllptlon under ouy renewable portfoUo l1lllldard or~ unc1er ouy lllllldonl, awkelpllco, or jurlldlolloo; (Ill) lho EnviroamontaJ Atlrlbotn mlcde to tbo copliile,

pcodDctlot~ purcbuo. ar ... of Produced Ou aad 110 Olher au; (lv) !be l!clvbonmonlal Allrlblsllolllball inGiude tbo rillht of 1he tepOrtln,s penon or entity to report lllat ll awnalho lln\'lronmeolal AllrlbutDI: (a)

to my apocy, llllhority or ot111r p111y uncler lilY emllalonlllldlns or J'eiiOIIini proaram, pllbllo or

priYalt, wbloh qeaoy,llllhority or olber p111Y thllbu jurildlatloD OYIIf or odtorwlla .,...._. or revlewa

tho actlvltieo of 10Gb poooa, and (b) to OUIIolll«< or poteatlll Ollllllmen fot tlto purpc>101 ofl1lldtelina and edvertlllns; (v) all Bnvlrollllllldal .A1Iributel, all ownership lntereot d!oreln, and aU rlgbr, tide and

Oilier 1ntereot there10 thaU be sold/conveyed under !be 1'l'lnucdon Codnaatloll aad hereby ftoo and

oloorofany liona and en~w--..;11111, (vi) Soller bastbo lepl right flO claim, Hlf,1ml11Ct

to eelf, and lraollir under tbo Trannollon Coalinnatl<lOI aU of tho Bnvlromnenlll Allrlbutos(lncludlna all ..,.,.Jmcl rlsbt, tltlollld 1-tltereln ond 1hcnlo).

Dollnftlom:

2

J LA000531

Attachment 4

"llnvlroameatal Alln'bv1N" mew: (A) any lllld llllilel, emislloas, odr quality or cdior a~virunmen111

chiii'IICiorblica orodlts, bcmoflts, redliOI!oat, oftiolt IIDd alloWIIICOS uaoolmd wl1h or resulliag fiool lho

capture, J1IGductioll, jllll'chue, or use ofl'lojoot Gas or lho avoklonoeoflho emlsaion of any su. chan !cal

or other IUbobuloe to lho air, ooU or Wiler lltrlbutlblt to suoh OIIJIIIn, produotian, pwolwo, oi' ~~~er; or

(B) any llld all~ credits, ~. rediiCiloat, oll'Jetl and al!owMoeo uoooi- wilh or

I'OIIUIIblgfi'om die PrqjoctOas belnau.Jed ulilomaa, llllmal-., olber WU1eruiterlw, or ull>o

product ofdlpatioa ofllllmal MDI crodlerWUIIImlllrfalt; reprdlcuofwbolher any IIIIOh

c1Wt1c11ri1tic, credit, benoftt, red•'Odoo, oflietcr allowance In (A) or (B) IJOI'OIIed by conlnlotor lriteJ

out of any Jaw, rulo or~ provldod, boMv«, die 11>rm "EEIvlromueotal Attribllla" aball cw:ludo (x) any11x-nlaWdat1rlbutel. illchldiJiiwiiiiOUt llmltldoo lillY IIIII &11-IDd tbden1 produc1lon 11x

otedits, any lnveatmentllxcredltt, tax~ or lax srmts. any lllhcirllx cndlll, and 1lx IDcentiYes or

tax aronts wlllch...., or will be aww- oreamod by lite production or captun1 of Project Gas lh!m a

lmdftll,lllll (y) any orodlia avallablofor doobacllanoflll<llhano, oorbon dioxide, nllrouaoxlde,

h)'drolltKlocotbout, ~ 1Uiphur houfluorido, or any other greenhouse PHS that.,.. or

will be s--.1 by lite oop111re (or productloot) lllld dertructlon (or 1111) ofPrqjeot Gas cr any otbor p1011

from a landfill For die avoldanoo of doulll, Jlnvinlamealll Alllibuolllhall illclude, but not be 11mll8d 11>:

(I) thoee that arc croalod by JC&lllalionl, 1t11u111, or odler ~ IIGIIoa IIIII (2)dloee that. can be

UMd to: (a)clainl IIIPOMI'lrility torlbe reduotlonofl!nllalllauallorPol~(u deflDod below). (b)

claim ownonlrip Ofllle Bmlalmq llldl« Pollldlllllllld 11101:lalecl nducdon riahU. aad (c) claim

reoponliblllty llwtbe avoldanoo of1he l!ralalklll ondlor Pollubula.

"Emisalons llld/or ~meant, oxcoptto 1he omnt exoluded ti'om lho doflnllion of''l!nvlroanlealll

Attribulet" above, any and all air quality cr otbot eaviloalllealll olm:aolorillloa uaoolaWd with tho

~ production, jllll'chue, cr uee ofl'rqjoct Gu, IDo1udfD&:, wllhoutllmltalion, acid rain precuncrs,

carbal dioxide, Oll'boD llK1IlOidde, oiJiorillllld hydrooeboal, lf'DIIhoulo auca. mercury, me1a1o, mothano (caphtte and-). n"'- oxldee, ~compoundt, ....... ~ particulalio ..-,

sulfilr dlodde, tox1o air pollutants, olber Ollbon lllld IUl1llt oompollldt, lad lllmUor polb- cr

oonllmllwdl of air, 'Wiler cr 101~ 1lllllor any peuuneutal, ,..W.Iol}'orvolu!lluypnlllllll,lnoludln&

but not 11mll8d to 1ho UJI!od Nllllmt FI'IGIIIWO!lc Convenllon on almala Ow!ao and m.ted JCralo Protoool (It any other JII0811Dl·

"Landfill Ou" moano 1ho au paeo- from the MIOI'Oblo dipltloa by~ bacclrla ofno11Jae

and other oolld - d!IJ>DObd In saniWy laadftlts, tho compo~~ltlon of wllkh au varloo, but IIIUOlly

contains me1hane In ll>o ranao of 40% to 60% by vnlume, and small peroentaau of bydmpn sulfide,

3

LA000532

---Attachment 4

.. ··-·--·· ....... ·---·····---- .. -·--·------

llll!llonio, and other guoous elem01l18.

"Pipeline" 11101111 Quod PlpoU1101 (KPC),

"DeUvery .Polntt"- (i) "Dellwry Polat A, "whldlla deftnod u 1llo polutot ~ boiwoeo tbo pd .. be plpolhle &cOIIIeaofSollerad tbo ~ plpe!IDt fadJllleo ofPipollne, which lalooalod

at Pipolinet' MAller 8tltloll #: 360476 In Zoo1e 3;~ Name: Wute Ou S1atial II; looalod in SeotioD I,

T<JWIIIblp 128, aanp 23B,Jolluon County, XIDiu; llld (II) "Deelvery PollltB,"whlch Ia dellDodu tbo

point of intlll'oooneoli ~>co~...- tbo ptbetioa plpellne filollll!oa of Seller 11\d tbo oiiSII>mOMiwned

pipeline fiollltloa ofO~ .t Sou C<lNbuclloo Co. ("'DSC"), MUoh b loaad at Seller's meter

filoillty IOOIIIOd ..u-nt 10 1ho Faolllty In 10hatoo County, Kaatu.

OftiOII"sSiptUre: ~ r. Officer'eNomo: ~~~ a"J...ok

r/!fo1

Tile Selkr tball h OD aotb that tile lafonulloa pmiCed Ia tWe AU.elatloa 111111 h liNd by

L , A . 0 . LJ. P. ud oftln, mdlult., wlllooat llmllatloa, u.s. Euiroa-bl

Protlctloa A&flleY ud t11o Ceater r.r .llelo1u'ee Bol1111ou, Ia ewbolaltiOI alldlor wrltf tbo

__, ol'lllolr cooaploa, ~ Uld/or public _.,IJIIcollo• eWaaa willa l'tlpect lu lbo

Elwlro-w Athlbwlol.u.ced to........,.

LA000533

I

. I d

1 I

Second Amendment to Transaction Confirmation executed July 27, 2009

between Shell Energy Nortb America (US), L.P •

and Los Angeles Department of Water and Power

.... ·.· .. •;·,. ·e.·.·~ .. ,. ......... _., ..• ,·,• .. -.. ,,,

This Second Amendment to the Transaction Confirmation ("Second Amendment'') is made and entered into this 31st day of March 2010 by and between Shell Energy North America (US), L.P. ("Shell Energy''), and Los Angeles Department of Water and Power ("LADWP''). Shell Energy and LADWP are hereinafter sometimes referred to individually 88 a "Party" and sometimes collectively referred to 88 the "Parties".

WHEREAS, LADWP and Shell Energy entered into that certain Base Contract for Sale and Purchase of Natural Gas dated February 1, 2008 (the "Base Contract''); and

WHEREAS, the Parties entered into that certain Transaction Confirmation executed by the Parties on July 27, 2009 to be effective August 1, 2009 (the "Confirmation'') 88 amended on August 25, 2009; and

WHEREAS, the Parties now desire to further amend the Confirmation in certain respects.

NOW, THEREFORE, in consideration of the premises and the agreements herein contained, the Parties agree to amend the Confirmation as follows:

REVISED PROVISIONS:

l. "Attachment C" Additions • The Confirmation is amended by adding a new "Attaclunent C-1 to the existing Attaclunent C" attached hereto, and titled as Additional Lan4flll Facilities.

As amended herein, the obligations and rights uoder the Confirmation shall remain in full force and effect.

IN WI1NESS WHEREOF, the Parties hereto have executed this Second Amendment on the date set forth above, but effective 88 of July 1, 2010.

Shell Energy North America (US), L.P. Los Angeles Department of Water and Power

By: Lt. L""=-Nam~: ~":J. ~ ~ Title: -e=-= ~ft.d

LA000534

Attachment C-1 to Attachment C to the Transaction Confirmation executed July 27,2009 (the "Confirmation") between Shell Energy North America (US), L.P. and Los Angele~~

Department of Water and Power

Additional Landfill Facilities

(1) Pinnacle Gas Producers, LLC Pinnacle Road Landfill in or near Moraine, Ohio, and the Stony Hollow Landfill in or near Dayton, Ohio.

(2) Westside Gas Producers, LLC Landfill, located in or near Three Rivers Michigan.

The following Special Provisions are applicable to the RB sourced from the above­described Landfills:

1. Performance Obligation: Beginning July 1, 2010, and through the remaining Delivery Period set forth in the Confmnation, Buyer shall purchase any and all RB that Seller may deliver to Buyer.

2. Contract Price: The Contract Price shall be as stated in the Confirmation, notwithstanding the reference to Attachment A or designated landfills.

3. Definition of Renewable Biomethane ("RB"): RB means Gas produced from the above described landfills containing the environmental attributes, as described in the attached Attestation.

LA000535